Panasonic is not yet committed to Tesla Gigafactory

Article by Christian A., on March 31, 2014

Panasonic Corp. has yet to commit to investing in the "Gigafactory" battery project in the United States as proposed by Tesla Motor Inc.’s Elon Musk since it would raise investment risks, according to Panasonic President Kazuhiro Tsuga. Panasonic is Tesla’s 's primary supplier of lithium ion cells for its electric Model S sedans.

Tesla disclosed plans for the Gigafactory in February and is reviewing possible locations sites in four southwestern US states. According to Tesla, the battery plant may need up to $5 billion to build and employ about 6,500 people by 2020. Musk has remarked that Panasonic may be involved in the factory, but said the battery maker’s participation is "not 100 percent confirmed."

Craig Irwin, an analyst for Wedbush Securities Inc., wrote in a note this week that having Panasonic as a joint venture partner would facilitate Tesla’s strategic access to the Japanese company’s supply chain, and reduce risks. Texas, Arizona, New Mexico and Nevada -- the four states that Tesla identified as potential locations -- have commenced lobbying efforts to secure the site.

Tesla has already raised around $2 billion in a convertible bond sale to help finance the construction of the the plant and for product development. According to Musk, the Gigafactory is critical to decreasing battery costs and to expand lithium ion cell supplies to allow Tesla to sell hundreds of thousands of EVs annually.

Tesla is also sekking to produce batteries for home storage of electricity generated by solar panels. Menahem Anderman, president of Total Battery Consulting Inc. that if Panasonic isn't involved, the factory will be more of a challenge for Tesla.

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